Sunday 21 January 2018

Developer must pay €1.57m over unfinished Caribbean resort

Tim Healy

A DEVELOPER must pay €1.57m damages over misappropriating large sums out of US$50m paid to his companies for a luxury Caribbean hotel and resort which was left unfinished, the High Court ruled.

Padraig (Paudie) O'Halloran (40) diverted some US$1.48m (€1.1m) paid to two companies in his Ice Group for the Buccament Bay resort to his personal bank accounts in Ireland while further payments of about €150,000 were made from his companies to `Weddings by Franc' for his wedding in Adare Manor, Limerick, which ultimately did not take place, Mr Justice Brian McGovern found.


Further payments totalling US$258,000 were also made from Mr O'Halloran's companies to the Irish bank accounts of his father, Donal O'Halloran, ostensibly to repay loans which Mr O'Halloran claimed were made to him by his father some years earlier, the judge said.


While Donal O'Halloran may have loaned money to his son some years ago, the evidence in that regard was unsatisfactory, the judge said.


The payment of those sums had no apparent benefit to either the Caribbean project or the Ice Group and the loans appeared to have been given by Donal O'Halloran to help out his son, the judge said.


In his evidence, Donal O'Halloran presented as an elderly man in frail health who seemed somewhat confused and the court was satisfied he was not knowingly a party to any misappropriation of the plaintiffs funds, the judge found.


In assessing damages against Padraig O'Halloran only, the judge said he had regard to all payments which were misappropriation of funds paid by two Caribbean companies - Harlequin Property SVG Ltd and Harlequin Hotels and Resorts Ltd, owned by David Ames of Essex, England - to the ICE Group companies as a result of fraudulent misrepresentation and deceit by Padraig O'Halloran.


There was also, he noted,  "persuasive" evidence Mr O'Halloran was diverting other substantial sums paid by Harlequin for other matters unconnected with Buccament Bay, including to buy a private jet, a racetrack in St Lucia, expensive gifts including a $65,000 diamond ring for his girlfriend, a quarry and renting an expensive mansion in Barbados.


While those matters were not part of the case taken by Harelquin in the Irish High Court against Mr O'Halloran and his father, they were offered as evidence corroborating the misappropriation of funds, the judge said. 


The Irish case is part of a multi-jurisdictional fraud claim arising from the Buccament Bay project and arose after the two Ice Group companies agreed with Harlequin in 2008 to complete the Buccament Bay resort after another company was dismissed following issues including alleged misappropriation of funds.


Harlequin alleged, between 2008 and June 2010, Mr O'Halloran misappropriated for his own personal benefit more than US$13.5m of some US$50m paid to the ice Group companies for the resort and lived a "very lavish" lifestyle at their expense.  It was claimed some US$2.25m was diverted to Ireland. Mr O'Halloran denied the claims.


Mr Justice McGovern said it was "extraordinary" there was no written contract for such a large development and that turned out to be a "very poor" decision by Mr Ames.


He found Mr O'Halloran, with  addresses at Shippool, Innishannon, Cork, and Sandy Lane, Barbados, had knowingly "or at the very least recklessly" reassured Harlequin phase one of the five star resort would be open on July 1, 2010, when Mr O'Halloran knew from November 2009 it would not. Mr O'Halloran was well aware Harlequin was under enormous commercial pressure to open in July 2010, he said.


The evidence established monies were sent to Ireland under bogus descriptions of "invoices" or "salary" so as to conceal their true purpose, he found.  From October 2009, Mr O'Halloran also deliberately tried to keep Mr Ames and Harlequin "in the dark" as to the true state of progress on the development.


After the two Ice Group companies - ICE Group (SVG) Ltd and Cellate Caribbean (SVG) Ltd - were dismissed from Buccament Bay in June 2010, the evidence was that site was "an absolute mess". While open areas around cabanas had been fully landscaped, the necessary water drainage systems were not in place with the effect there was sewage in the soil, the judge said.


Mr O'Halloran, he noted,  has now involved  in  a new construction and civil engineering company in Jordan.

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